Posts Tagged ‘Japan’

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Sovereign Debt Jubilee, Japanese-Style

Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.

Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.

A lot of interest.

If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.

Personal income taxes are at record highs, ringing in at $550 billion in the first four months of fiscal year 2017, or $1.6 trillion annually. But even at those high levels, handing over $830 billion to bondholders will wipe out over half the annual personal income tax take. Yet what is the alternative?

Japan seems to have found one. While the US government is busy driving up its “sovereign” debt and the interest owed on it, Japan has been canceling its debt at the rate of $720 billion (¥80tn) per year. How? By selling the debt to its own central bank, which returns the interest to the government. While most central banks have ended their quantitative easing programs and are planning to sell their federal securities, the Bank of Japan continues to aggressively buy its government’s debt. An interest-free debt owed to oneself that is rolled over from year to year is effectively void – a debt “jubilee.” As noted by fund manager Eric Lonergan in a February 2017 article:

The Bank of Japan is in the process of owning most of the outstanding government debt of Japan (it currently owns around 40%). BoJ holdings are part of the consolidated government balance sheet. So its holdings are in fact the accounting equivalent of a debt cancellation. If I buy back my own mortgage, I don’t have a mortgage.

If the Federal Reserve followed the same policy and bought 40% of the US national debt, the Fed would be holding $8 trillion in federal securities, three times its current holdings from its quantitative easing programs.

Eight trillion dollars in money created on a computer screen! Monetarists would be aghast. Surely that would trigger runaway hyperinflation!

But if Japan’s experience is any indication, it wouldn’t. Japan has a record low inflation rate of .02 percent. That’s not 2 percent, the Fed’s target inflation rate, but 1/100th of 2 percent – almost zero. Japan also has an unemployment rate that is at a 22-year low of 2.8%, and the yen was up nearly 6% for the year against the dollar as of April 2017.

Selling the government’s debt to its own central bank has not succeeded in driving up Japanese prices, even though that was the BoJ’s expressed intent. Meanwhile, the economy is doing well. In a February 2017 article in Mother Jones titled “The Enduring Mystery of Japan’s Economy,” Kevin Drum notes that over the past two decades, Japan’s gross domestic product per capita has grown steadily and is up by 20 percent. He writes:

It’s true that Japan has suffered through two decades of low growth . . . . [But] despite its persistently low inflation, Japan’s economy is doing fine. Their GDP per working-age adult is actually higher than ours. So why are they growing so much more slowly than we are? It’s just simple demographics . . . Japan is aging fast. Its working-age population peaked in 1997 and has been declining ever since. Fewer workers means a lower GDP even if those workers are as productive as anyone in the world.

Joseph Stiglitz, former chief economist for the World Bank, concurs. In a June 2013 article titled “Japan Is a Model, Not a Cautionary Tale,” he wrote:

Along many dimensions — greater income equality, longer life expectancy, lower unemployment, greater investments in children’s education and health, and even greater productivity relative to the size of the labor force — Japan has done better than the United States.

That is not to say that all is idyllic in Japan. Forty percent of Japanese workers lack secure full-time employment, adequate pensions and health insurance. But the point underscored here is that large-scale digital money-printing by the central bank used to buy back the government’s debt has not inflated prices, the alleged concern preventing other countries from doing it. Quantitative easing simply does not inflate the circulating money supply. In Japan, as in the US, QE is just an asset swap that occurs in the reserve accounts of banks. Government securities are swapped for reserves, which cannot be spent or lent into the consumer economy but can only be lent to other banks or used to buy more government securities.

The Bank of Japan is under heavy pressure to join the other central banks and start tightening the money supply, reversing the “accommodations” made after the 2008 banking crisis. But it is holding firm and is forging ahead with its bond-buying program. Reporting on the Bank of Japan’s policy meeting on June 15, 2017, The Financial Times stated that BoJ Governor Kuroda “refused to be drawn on an exit strategy from easy monetary policy, despite growing pressure from politicians, markets and the local media to set one out. He said the BoJ was still far from its 2 per cent inflation goal and the circumstances of a future exit were too uncertain.”

Rather than unwinding their securities purchases, the other central banks might do well to take a lesson from Japan and cancel their own governments’ debts. We have entered a new century and a new millennium. Ancient civilizations celebrated a changing of the guard with widespread debt cancellation. It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens.

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Ellen Brown is an attorney, founder of the Public Banking Institute, a Senior Fellow of the Democracy Collaborative, and author of twelve books including Web of Debt and The Public Bank Solution. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com. <https://ellenbrown.com/&gt;.

300+ blog articles are posted at EllenBrown.com.

300+ blog articles are posted at EllenBrown.com.

 

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Japan to Re-Enter Empire Game

Posted: September 18, 2015 in -
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Members of Japan's Self-Defence Forces' airborne troops march during the annual SDF troop review ceremony at Asaka Base in Asaka, near Tokyo October 27, 2013. Japanese Prime Minister Shinzo Abe, in an interview published on Saturday, said Japan was ready to be more assertive towards China as Beijing threatened to strike back if provoked. REUTERS/Issei Kato (JAPAN - Tags: POLITICS MILITARY) - RTX14PU2

Parliament approves war bills allowing troops to fight abroad.

permitting the military to fight overseas – something banned for 70 years since WWII.

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Radioactive Fukushima food could be hitting UK shops through safety loopholes

The report follows revelations in Taiwan last month that more than 100 contaminated products from Fukushima were being sold in stores under false labels.

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In what should be considered an ongoing Crime Against Humanity, poisoning the Pacific Ocean with uncontrolled releases of radioactivity, the Fukushima debacle continues 4 years on.

Fukushima No. 1′s never-ending battle with radioactive water

he nightmare continues at Tokyo Electric Power Co.’s Fukushima No. 1 nuclear plant, which suffered three reactor core meltdowns and is plagued daily by increasing amounts of radioactive water.

FUKUSHIMA 4 YEARS ON

Everyone responsible should, of course, be tried and imprisoned. Tepco should be dissolved and replaced immediately. An international force of experts and aid should descend upon the site and stop the radiation from entering the ocean. Atomic power should be outlawed as an unnecessary risk, and plants shut down permanently.

Fukushima Cancers

Posted: February 9, 2015 in -
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Already, 85 children have had surgeries for thyroid cancer, there are 112-113 children who are suspected of having cancer. When children get cancers it progresses very quickly. The former person in charge of health, Yamashita Shunichi, said it would be only a 1 in a million chance of children getting any kind of cancer because of radiation. But he was lying. Right now, it’s like 1 in 3,000 — it’s an epidemic

The head of the National Cancer Research Center estimated right now in Fukushima the rate of cancer has gone up 61 times. And yet the gov’t and also the hospitals related to the gov’t are saying this is not because of radiation.

Report From Fukushima And The Abe Government Expansion And Export Of Nuclear Plants

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News Anchor Revolts

This explains why my Future Children of Fukushima article and the Chernobyl Horrors page have been the most viewed pages/articles I’ve ever posted. I’ve not met a nuclear apologist yet who could withstand the avalanche of evidence.

“I am a newscaster, but I couldn’t tell the true story on my news program,” says Jun Hori, a former anchor for NHK, the Japanese state broadcaster.

Hori says the network restricted what he and other journalists could say about Fukushima and moved more slowly than foreign media to report on the disaster and how far radiation was spreading. The attitude in the newsroom was not to question official information

Japan has dropped 31 places since 2011 in a World Press Freedom ranking compiled by the group Reporters Without Borders.

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Japanese Doctor: “Tokyo should no longer be inhabited”

” contamination in the east part [of Tokyo] is 1000-4000 Bq/kg and the west part is 300-1000 Bq/kg. […] 0.5-1.5 Bq/kg before 2011. […] Tokyo should no longer be inhabited […] Contamination in Tokyo is progressing, and further worsened by urban radiation concentration”

 

Experts: Fukushima ‘globally enhanced’ cesium-137 levels in air by 2 to 3 orders of magnitude

 

Clearly detectable in tuna at California coast…

Sure enough every single fish without exception was radioactive. Every single one. They were all like clones of each other… all the same [levels of radioactive cesium from Fukushima].